There is probably little need for formal econometrics with this chart: Australia’s
level of happiness looks to be entirely appropriate for a country at her level of
development. The problem with Blanchflower and Oswald’s inference of an Australian
unhappiness paradox is that there are almost no differences in the HDI across
industrialized nations. (Indeed, the 2004 Human Development Report (UNDP 2004)
notes that the Human Development Index is not well suited to making fine distinctions
among developed countries.) Hence Australia’s high ranking on that index does not
suggest that it should be an outlier on happiness. Figure 1 suggests that the relevant
comparison set is the group of other industrialized nations, and Australia is happier than
most of them.